Removing Stigma Talking About Debt Is Crucial To Avoid Most Insolvency Problems, Says Middlebrooks Advice
The UK is struggling in terms of consumer debt, particularly the younger generations, with 55% under the age of 35 needing debt advice and 24% of the general population struggling to keep up with bills and credit commitments. While these struggles may initially be bearable, failure to address them promptly can cause them to get worse, with individuals sinking deeper into a hole of debt that is incredibly hard to dig out of. This can cause considerable mental anguish, sleepless nights, and, in the worst cases, suicide. A report by the Money and Mental Health Policy Institute found that a majority (58%) of people with debts exceeding £30,000 had been suicidal in the previous year.
According to Claire Middlebrook, founder and CEO of Edinburgh-based insolvency practitioners Middlebrooks Advice, the hesitance to talk about financial distress is causing more harm than good. The social stigma of admitting that they have financial problems is so great that many people keep it to themselves, choosing to withhold the situation even from the people closest to them.
"Debt problems are something that can happen to anyone," Middlebrook says. "But there's a stigma around it so everyone keeps it a secret. They believe that, because they've gotten themselves into debt, other people will think that it's their fault and they must have done something naughty. Some think that they could go to prison because of debt, but that was abolished in the 1800s. I have even spoken to people who've said that they're thinking of ending their own lives rather than tell their spouse or parents about their debt."
Middlebrook believes that the increasingly easy access to credit has played a role in worsening the debt crisis. In decades past, individuals were mostly limited by the amount of cash they had in their wallet or bank account. However, today, paying by credit has become so widely accepted that some people may be spending above their means and it's already too late when they realise it.
Furthermore, Middlebrook says that, instead of asking for advice from insolvency professionals, some debtors would rather take advice from strangers on the internet or other unreliable sources. Because these people are not qualified to give insolvency advice, they are most likely to only make things worse. She believes that, aside from the stigma surrounding debt, there is also a misconception that insolvency professionals are not on their side and will take everything they own, leaving them with nothing.
"One of the largest myths about our profession is that we're against the person that's in debt. But, that's not the case at all, as we are professionally bound and have a duty of care to that individual," Middlebrook says. Whenever I talk to clients, I tell them that part of my job is to help them get back to a positive future in the most pain-free way possible."
As insolvency practitioners, Middlebrooks deals with all aspects of getting its clients out of debt. It keeps clients involved in the process and fully informed of the consequences that can arise from insolvency, explaining it in jargon-free and easy-to-understand language. For individuals, Middlebrooks can set up trust deeds, individual voluntary arrangements, or file for sequestration, while it can guide corporations through various administration, liquidation, and company restructuring processes.
When dealing with clients, Middlebrooks is guided by its core values of SPICE – Support, Positivity, Improvement, Commitment, and Engagement. The team approaches people's insolvency problems in an honest, understanding, and non-judgemental manner.
"A vast majority of people that come to see us tell us that we're not as scary as they thought we were going to be, and that they wish they'd done it earlier," Middlebrook says. "We believe that we can accomplish more if we show the client empathy and listen to their story, instead of barrelling in and talking to them in a threatening way."
While it is using technology to automate some parts of the process, such as bank and credit card statements, mortgages, and money laundering checks, Middlebrooks seeks to maintain the human touch with its clients. Its client-facing staff is trained in mental health first aid, allowing them to recognise the signs of mental distress in the people they interact with. It also has a vulnerable persons policy, that governs how it interacts with clients and sets out extra precautions when working with people that are deemed vulnerable.
Middlebrook believes that some level of debt is a normal part of life. However, it's important for individuals to spot the warning signs that their debt levels are approaching unmanageable territory and immediately take action, which can include talking to an insolvency professional.
"For people receiving a monthly salary, they need to look at the percentage of their income that is going out to service their debt," she says. "You certainly wouldn't want to be spending more than a quarter of your monthly salary on servicing your debts. While debt consolidation services are widely available, having to use them often is another major warning sign. When it comes to avoiding being trapped in debt, the most important thing is being honest with yourself – because it's only you who can know what you can afford and what you can't on a month-to-month basis."
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